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Titel
The rising longevity gap by lifetime earnings : distributional implications for the pension system / Peter Haan (DIW Berlin, FU Berlin, NETSPAR and IZA), Daniel Kemptner (DIW Berlin), Holger Lüthen (FU Berlin and DIW Berlin) ; IZA Institute of Labor Economics
VerfasserHaan, Peter In der Gemeinsamen Normdatei der DNB nachschlagen ; Kemptner, Daniel In der Gemeinsamen Normdatei der DNB nachschlagen ; Lüthen, Holger In der Gemeinsamen Normdatei der DNB nachschlagen
KörperschaftForschungsinstitut zur Zukunft der Arbeit In der Gemeinsamen Normdatei der DNB nachschlagen
ErschienenBonn, Germany : IZA Institute of Labor Economics, October 2017
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Elektronische Ressource
Umfang1 Online-Ressource (29, 18 Seiten) : Diagramme
SerieDiscussion paper ; no. 11121
URNurn:nbn:de:hbz:5:2-142604 Persistent Identifier (URN)
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The rising longevity gap by lifetime earnings [0.64 mb]
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Zusammenfassung

This study uses German social security records to provide novel evidence about the heterogeneity in life expectancy by lifetime earnings and, additionally, documents the distributional implications of this earnings-related heterogeneity. We find a strong association between lifetime earnings and life expectancy at age 65 and show that the longevity gap is increasing across cohorts. For West German men born 1926-28, the longevity gap between top and bottom decile amounts to about 4 years (about 30%). This gap increases to 7 years (almost 50%) for cohorts 1947-49. We extend our analysis to the household context and show that lifetime earnings are also related to the life expectancy of the spouse. The heterogeneity in life expectancy has sizable and relevant distributional consequences for the pension system: when accounting for heterogeneous life expectancy, we find that the German pension system is regressive despite a strong contributory link. We show that the internal rate of return of the pension system increases with lifetime earnings. Finally, we document an increase of the regressive structure across cohorts, which is consistent with the increasing longevity gap.